Nokia Shares Crushed

May 31, 2011
J. Webster
Comments Off on Nokia Shares Crushed

Nokia, citing “competitive dynamics and market trends across multiple price categories, particularly in China and Europe”, is getting crushed this morning. The stock was down over 15% and hitting a low new 52 week low of 6.79. It has since bounced off this low, and is back over $7, but, as they say, the trend is DOWN for this stock.

Reuters Pictures

That’s left Nokia selling mostly cheaper phones. It’s inked a partnership with Microsoft to sell Windows-powered phones, but those devices aren’t due to ship until the fourth quarter.

The company said second-quarter devices and services sales will be “substantially” below its previous range of 6.1 billion to 6.6 billion euros ($8.8 billion to $9.5 billion). Its adjusted operating margin in devices and services for the quarter will be “substantially” below its 6% to 9% range — and possibly not even positive, saying they could be “around break even.”

What’s interesting is the dividend yield is now at 5.70%. I wonder if it’s worth a shot on this stock, as they still have the Microsoft deal that could save them…..well, perhaps. Could be a like trying to catch a falling knife. They are of course getting crushed by Apple’s iPhone and Google’s Android operating system. It will be interesting to see how this will plays out, will Blackberry and Nokia be left for dead, while Apple and Google take over?

What’s worrying though for Nokia, is the new CEO, Stephen Elop, set these targets only a few weeks ago. Why the sudden adjustment to targets? Not a good sign. Might signal some turmoil within the ranks of Nokia.

The big question is what will happen to their Symbian operating system. Word is Microsoft’s operating system, Window’s Phone 7, will power ‘high’ end smart phones and Nokia’s Symbian will power the lower end phones.

This is the great race to own the cell phone market, who will win? Don’t think it will be Nokia or RIMM, but they will most likely maintain some share of the market. Microsoft as savior, that’s an odd role for them to play.

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